Country Report of The Gambia

Economist Intelligence Unit, 2nd quarter 1997

Political structure

Official nameThe Republic of The Gambia
Form of stateUnitary republic
Legal systemBased on English common law and the 1996 constitution
National legislatureHouse of Assembly: installed on January 16 1997 following its suspension after the military coup of July 1994; 49 members, 45 elected by universal suffrage, four nominated by the president; all serve a five-year term
National electionsSeptember 1996 (presidential), January 1997 (legislative); next elections due September 2001 (presidential) and January 2002 (legislative)
Head of statePresident, elected by universal suffrage for a five-year term
National governmentThe president and cabinet
Main political partiesThe ban on political activity was lifted in August 1996, but three pre-coup parties (the People's Progressive Party, the Gambia People's Party and the National Convention Party) remain proscribed. The ruling party is the Alliance for Patriotic Reorientation and Construction (APRC); the United Democratic Party (UDP) and the National Reconciliation party (NRP) are the main opposition parties
The governmentFollowing the January 16 inauguration of House of Assembly delegates, the new cabinet was announced in March 1997

President & minister for defenseYahyah Jammeh
Vice-president & minister for health, social welfare & women's affairsIsatou Njie Saidy

Key ministers
AgricultureMusa Mbenga
Civil serviceMustapha Wadda
Culture & tourismSusan Waffa-Ogoo
EducationSatang Jow
External affairsOmar Njie
Finance & economic affairsDominic Mendy
Interior & religious affairsMomodou Bojang
Justice & attorney generalHawa Sisay Sabally
Local government & landsYankuba Touray
Presidential affairs, national assembly, civil service, fisheries & natural resourcesEdward Singhateh
Public works, communications & informationEbrihima Ceesay
Trade, industry & employmentFamara Jatta
Youth & sportsLamin Bajo
Central Bank governorClarke Bajo

Economic structure

Latest available figures

Economic Indicators19921993199419951996
GDP at market pricesb D m2,9482,5192,886n/an/a
Real GDP growthb %
Consumer price inflation %
Populatione '0009861,0261,0801,1201,161
Exports fobb $ m147.0157.0125.0123.0130.0
Imports fobb $ m177.8214.5181.6162.5168.0
Current accountb $ m37.2-5.38.2-8.2n/a
Reserves excl gold $ m94.0102.2f98.0106.2101.8d
Total external debt $ m403.4425.4421.3425.6n/a
External debt-service ratio %12.711.714.414.0n/a
Groundnut productiong '000 tons84.254.976.780.832.0
Charter touristsb '00065.863.990.043.367.1c
Exchange rate (av) D:$8.899.139.589.559.78d
May23, 1997 D9.909:$1

Origins of gross domestic product 1994b% of total
GDP at factor cost100

Components of gross domestic product 1994b% of total
Private consumption74
Government consumption18
Gross domestic investment20
Exports of goods & services53
Imports of goods & services-65
GDP at market prices100

Principal exports 1993b$ m
Fish & fish preparations2.7
Groundnuts (shelled)1.5

Principal imports 1993b$ m
Machinery & transport equipment61.7
Minerals & fuel15.7

Main destinations of exports 1995h% of total
Hong Kong9.2

Main origins of imports 1995h% of total
Cote d'Ivoire13.9
Hong Kong9.8


a EIU estimates.
b Fiscal year ending June 30.
c Official estimate.
d Actual.
e Based on 1993 census.
f End-September.
g Crop years ending in calendar years.
h Derived from partners' trade returns, subject to a wide margin of error.

Outlook for 1997-98

Mr Jammeh is trying to build new alliances abroad-Aware of the fact that his regime is not looked on favourably by The Gambia's longstanding allies and aid donors, the UK, the Commonwealth and the USA, and of the distinctly faint praise with which his recent transition from army coup leader to elected civilian president was received by the EU, the president, Yahyah Jammeh, is bent on building productive alliances elsewhere. He is not the only aid-hungry African president to have capitalized on Taiwan's desperate search for diplomatic recognition: The Gambia's friendship with Taipei has already yielded generous helpings of new bilateral assistance, and will no doubt continue to do so. Mr Jammeh has also cultivated alliances with Egypt, Libya, Nigeria and Iran.

-but he still needs the approval of the big donorsIn the longer term, however, The Gambia's government still needs the major sources of bilateral and multilateral assistance and debt relief on which it has depended for decades, with as much as 70% of government revenue coming from aid in the years directly before the coup. The country's only other significant sources of foreign exchange, tourism and groundnut exports, have been badly hit since 1994, the former by European reactions to the military takeover and the latter by poor rainfall. The once profitable re-export trade to Senegal and other Franc Zone states has been hit by currency restrictions in those countries and by the devaluation of the CFA franc.

In terms of restoring aid, Mr. Jammeh has taken the right steps. He has retired from the army and become a civilian, won an election and will probably be The Gambia's president, by fair means or foul, for many years to come. But donors will wait to see whether the country moves to real rather than cosmetic democracy and whether the government is prepared to respect human rights. This in turn depends on whether the government can control the armed forces. Anecdotal evidence suggests that it cannot.

The economy may be entering a difficult patch-Agriculture has had two poor years. Groundnut output has fallen drastically and the sector desperately needs aid, in the form of inputs, investment and training. Tourism has been slow to recover and remains highly sensitive to the political situation, although if Mr Jammeh can keep order in the streets without creating an oppressive atmosphere, it should be able to maintain its recovery.

-and the government should heed the Central Bank-The Central Bank of The Gambia has called for confidence-building measures in order to bring the private sector more strongly into the development process, pointing out the need for a "prudent and appropriate" fiscal policy in order to maintain stability. In the early years of Mr. Jammeh's rule, the authorities relied heavily on confiscation of assets from discredited former politicians and officials, but this is clearly only a short-term source of revenue and a well-managed taxation system is now being called for.

-if its growth projections are to stand any chanceThe government's hopes for 3.2% GDP growth in fiscal year 1996/97 (July-June) remain realistic, but matching even that modest level of growth may be difficult
in 1997/98. Estimates of tourist numbers in the region of 80,000-90,000 in the current season may have to be scaled down and the poor groundnut crop will also have an impact.

Click on graph for larger image


The political scene

Opposition MPs demand a government-On February 27, six weeks after The Gambia's newly elected House of Assembly (parliament) began sitting, members of the opposition United Democratic Party (UDP) walked out, protesting that the president, Yahyah Jammeh, had failed to form a government, as required by the new democratic constitution which the former coup leader had sworn to honour (1st quarter 1997, pages 24-25). The UDP has seven of the 16 opposition seats in the 49-member Assembly.

-after Captain Singhateh's age becomes an issue-The reason for the delay was that Mr Jammeh had wanted his former fellow officer in the Gambian army and, until then, the defenc]se minister, Edward Singhateh, to become his vice-president. However, the constitution specifies that both the president and the vice-president must be aged between 30 and 65. Mr. Jammeh had himself introduced the age stipulations as a device to keep out a generation of former politicians (3rd quarter 1996, page 23). In February this year, Mr. Singhateh was only 27, four years the president's junior.

-until a suitable post is found for him-When Mr. Jammeh finally announced his new 13-member government on March 7, Mr. Singhateh-now calling himself Captain (rtd)-emerged with a newly created super-ministry under the title of Secretary of State to the Presidency, with responsibility for presidential affairs, relations with the assembly, the civil service, fisheries and natural resources. Four ministers in the outgoing government lost their portfolios: Lamin Bajo (interior), Baboucar Blaise Jagne (exterior affairs), Amina Faal-Sonko (youth and sports) and Bala Garba Jahumpa (finance and economic affairs).

-but the opposition still has objectionsThere was still no vice-president, and in a statement on March 10 the UDP leader, Ousainou Darbo, a lawyer, alleged that the new government had no legal standing. Mr. Darbo argued that the formation of a government without a vice-president was a violation of Article 67 of the constitution, which could even lead to the dismissal of the president. Ten days later Mr. Jammeh named as vice-president Isatou Njie Saidy, who also retained her position as secretary of state for health, social welfare and women's affairs. An economist who studied in the UK, the Netherlands and the Philippines, Mrs. Njie Saidy was chairman of the Gambian Women's Union before her appointment to the government in July 1996 (3rd quarter 1996, page 24).

The president honours a pledge to free political detainees-Twelve political prisoners, five of them members of the security forces, were freed from detention on February 3 under a presidential decree marking Ramadan, the Muslim month of fasting, and Mr. Jammeh's return from a pilgrimage to Mecca. They included Pa Sallah Jagne, who was chief of police under the overthrown former president; his former deputy, Ebrahima Chonga; Mr. Jammeh's former chief-of-staff, Ebrahima Kambi, who had been accused of plotting against the president; and Lamin Waa Juwara, a former MP who has been arrested repeatedly since Mr Jammeh seized power. The French news agency, Agence France-presse (AFP), reported on February 18 that the only detainees remaining were two army corporals accused of attempting a coup against Mr Jammeh in November 1994 (4th quarter 1994, page 22; 1st quarter 1995, pages 18-19).

-but the authorities are still edgyThe return of democratic government has not, however, brought a return to the free-and-easy lifestyle to which Gambians and European tourists had grown accustomed during three decades of benign neglect under the former president, Dawda Jawara, and Mr Jammeh and his group are always on the lookout for signs of dissidence. Three weeks after the latest releases of detainees, the commander of the presidential guard, Lieutenant Sanneh, was taken into custody. Four Liberian journalists found themselves harassed by the authorities in various petty ways in January before being deported: their news-paper, the Daily Observer, had just reported on an allegedly corrupt transaction between senior government figures and a Swiss bank. More generally, there are persistent reports of official paranoia, marked by periodic spates of arbitrary arrests, the seizing of private property, especially cars, and increasing boldness and violence on the part of the feared National Intelligence Agency.

Relations with Taiwan are all smiles-The Dutch presidency of the EU issued a statement on January 27 congratulating "the people and the independent electoral commission" on the way in which the legislative elections in January had been conducted, while also noting that the ban on three former political parties was still in force. Relations with Taiwan, however, have flourished. Taiwan is currently The Gambia's biggest bilateral aid donor and its foreign minister, John Chang, arrived in Banjul on January 20 for two days, receiving a warm welcome from Mr. Jammeh who thanked Taiwan for its support since diplomatic relations were established in July 1995, to the annoyance of Beijing (3rd quarter 1995, page 20; 4th quarter 1995, page 23). So far, Taiwanese aid has focused on help with rice cultivation, medical training and provision, and road building.

-and Mr. Jammeh visits Egypt and NigeriaMr. Jammeh made a four-day visit to Egypt in late January, on his way to Mecca. He met the Egyptian president, Hosni Mubarak, and a joint communique spoke of the two countries' desire for close cooperation in a variety of fields, including tourism and technical assistance. The following month he went to the Nigerian federal capital, Abuja, for two days of talks with the Nigerian head of state, Sani Abacha. In an official statement General Abacha praised Mr Jammeh for restoring democratic rule; a Nigerian spokesman said that the military leader had briefed the Gambian president on Nigeria's plans for local government elections and on his regime's commitment to "a successful transition to civilian rule". Both leaders have incurred the reproach of the Commonwealth, which in February reiterated concerns about the "flawed" process of Gambian democratisation.

The economy

Groundnut farmers have had a disastrous season but tourism is risingAccording to the latest official figures, total arable output for 1993/94-94/95 was relatively stable at around 175,000 tons, with an 11.6% fall in coarse grains, particularly maize, offset by a rise in rice production from 12,060 tons in 1993/94 to 20,270 tons in 1994/95. Since then, however, production of groundnuts, the country's main export, has fallen off drastically. Tn 1994/95 a 9.2% expansion of land under cultivation produced 80,800 tons, while the total harvest for 1996/97 was only 16,000 tons. The director-general of the Gambia Cooperative Union (GCU), Lamin William Jammeh, blamed low and unevenly distributed rainfall, the poor state of much of the country's arable land, inadequate planting, the drift of farm workers to towns, shortage of fertilisers and a lack of cooperation between the agricultural services and farmers. Many donors withdrew their support for the union, which acts as both bank and wholesaler for its 110,000 members, following financial scandals in 1989 and 1993.

Click on graph for larger image
The Gambia: groundnut cultivated area and production
('000 ha)
('000 tons)
Sources: Ministry of Agriculture; Gambia Produce Marketing Board; Gambia Cooperative Union.

The latest available statistics for tourist visits show that in the 1995/96 financial year 67,098 air-charter tourists visited The Gambia, compared with 43,317 in 1994/95 following the coup, when the contribution of hotels and restaurants to GDP fell by 60%. The government and hotel operators have had little success in diversifying the sources of tourists away from the UK, Scandinavia and Germany. But now that the UK and other European governments have withdrawn their advice against visiting The Gambia, the number of arrivals is likely to continue to rise.

A weaker balance of payments reflects political events-The balance-of-payments position, as disclosed by the Central Bank, weakened in 1994/95 from an estimated surplus of SDR4.5m in 1993/94 to a deficit estimated at SDR4.9m. A significant cause was the ban on the repurchase of CFA franc notes by the issuing authorities in neighbouring Franc Zone countries, with which The Gambia had built up a profitable re-export trade. Mean-while, the fallout from the coup affected tourism, foreign direct investment and short-term trade finance. The deficit was financed by drawing on official reserves, which nevertheless increased due to a lower import bill, bringing reserve cover at the end of June 1995 to the equivalent of six months of imports.

-which were also reflected in lower GDPGDP was estimated to have fallen by 6.5% in 1994/95 in real terms, to D564.59 from D604.05m in 1993/94, as a result of a broad deterioration across the economy. Consumer prices appear to have remained fairly stable over the past few years and not to have been affected unduly by the political and external factors which affected the economy as a whole; official figures show that consumer price inflation averaged 1.1% in 1996. According to the Central Bank, in order to achieve its aims the government needs to focus on stability, strengthen the primary role of the private sector in the development process, rationalise its revenue base and continue to tighten fiscal and monetary policies.

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